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Sen. Dan Hughes

Sen. Dan Hughes

District 44

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Since my last article, I have received a few more questions about the R-Line and wanted to give some additional facts about the project, as well as further explain my position. There are two groups in the Sandhills, one is opposing wind development and the other is opposing the R-Line, both are small but enthusiastic.

Senator Brewer and I have sat down with NPPD and had some very frank discussions about all aspects of the R-Line Project and how we have arrived at this point. Probably one of the biggest complaints is why does the line have to go north to Thedford and then east to Holt County. Why can it not go across country north east and avoid a greater distance and much of the sandhills. First, if you think of our electric grid as a spider’s web you will see there is usually a main framework of structural threads with lots of smaller and shorter interconnected threads. Well, northern and eastern Nebraska is missing one of those main structural threads that would keep the entire web from collapsing during a peak demand period or a severe weather event. Another piece of the puzzle is that the Legislature, before my time, passed a law that transmission lines can only be built on the mile or half mile lines. This is sound legislation, but it does make it problematic to build a cross country transmission line in a diagonal direction. Another fact is that most of Nebraska’s major transmission lines run east and west along the platte river valley. By building the R-Project it completes a path for power to continue to serve customers between west and east if there is another ice storm or wind event that takes down the electric grid in that area.

If you review the record, you will find I was one of the few Senators who filibustered LB 824 in 2016. LB 824 is the bill that really opened the door for wind development. The problems I have with LB 504 have to do with personal property rights and local control. First, personal property rights are very important to me as a landowner. Having the government interfere with the use of my land is something that I take very seriously. However, by the same token I must also respect the rights of my neighbors to do with their property what they see is in their best interest. There are local zoning laws in place in most of Nebraska’s counties to help with the siting of developments in an area, and that is truly local control.

If the state stands in the way of wind development what is next, pipe lines, electric lines, golf courses, center pivots, etc…? There are a whole host of well-funded groups who are just looking for an opening to advance their agenda of stopping capitalism and taking away our personal property rights, in any way possible.

With the summer already in full swing, the election campaigning has begun. In the past few weeks we have heard current Governor Pete Ricketts is planning to seek re-election, as well as, current US Senator Deb Fischer. Governor Ricketts has already been endorsed by the Nebraska Republican Party’s state central committee. Other candidates seeking political offices are: Charlie Jansen, who is the current State Auditor will be seeking re-election and Bob Evnen who is running for Secretary of State. At this time there is no declared candidate for treasurer of the State of Nebraska. In the legislature there are six senators that will be term limited out plus one senator who has indicated he will not be seeking re-election. This will again result in a significant number of new senators in the body.

Former Nebraska Speaker of the Legislature, Mike Flood has said he will not be running for governor in 2018. Mike Flood who is a republican from Norfolk made these comments after former Governor Dave Heineman told Lincoln’s KLIN radio that Flood would make a great governor. The former senator announced he would be running for governor in the 2014 election but withdrew the following month due to family health issues. Former Governor Heineman also expressed that he is disappointed that the property tax issue has yet to be solved over these past two years. Governor Heineman was in office for ten years and failed to solve the property tax problem. Part of the way the Heineman administration balanced the state’s budget was to cut state aid to schools and counties which caused local property taxes to increase in order to maintain services. It is very clear in Lincoln that former Governor Heineman is not very friendly to current Governor Ricketts or his administration.

This past week the LR 127 Committee had their first two tours to the Tecumseh State Correctional Institution and the Nebraska State Penitentiary. We had the opportunity to sit down with several members of the corrections state and representatives of inmate groups to discuss issues that they are facing.

These past few weeks I have spent some time traveling around the district. I first stopped in Alma and spoke at the open house/dedication of the Alma Municipal Airport Terminal Building. While I was in McCook I spoke with the Chamber for a town talk over breakfast and stopped by the Coffee with a Cop to speak with constituents. I then had the opportunity to meet with the County Commissioners from two different counties in my district; Red Willow and Furnas. If you would like me to speak at a town hall feel free to contact my office to arrange a time.

The interim is a good time for senators to look deeper into issues that need to be addressed. Next week a few of the legislative committees will begin to hold interim briefings. On Tuesday, June 27 the Health and Human Services Committee will hold two briefings, which are open to the public or you can watch them on NET livestream. The briefings held in the Health and Human Services Committee will be on rate methodology for dual-eligible and a quarterly briefing on Heritage Health. The majority of the other interim hearings will begin in late summer. I will try to keep you updated on hearings that may be of interest to the 44th legislative district.

I mentioned in my last article that I am a member of the LR 127 committee (Nebraska Justice System Special Investigative Committee) besides this committee a number of senators will be looking into issues which also affect our correctional system. LR 114 is an interim study to examine Nebraska’s statutes relating to geriatric or compassionate release laws for elderly inmates. LR 191 Interim study to examine possible legislative reforms to Nebraska’s mandatory minimum sentencing laws. LR 221 Interim study to examine possible reforms to Nebraska’s sentencing laws to accommodate an option of deferred judgment probation. Addressing the issues with corrections is not a simple process, there are a lot of different things that affect the system as a whole and we must not only identify the issues within the facilities but we need to find ways to reduce the recidivism rate and keep people from coming back.

In 2016 the legislature created the Transportation Innovation Act. Created through this act is the County Bridge Match Program, this program targets $40 million to replace or repair structurally deficient county bridges. This program provides financial assistance to counties for construction costs. The first year 68 bridges were selected and of those 6 are in the 44th legislative district. Safe and dependable roads are vital to rural communities.

Despite this session’s slow start the first session of the 105th Legislature adjourned sine die on the 86th day of the 90-day scheduled session. This session we worked to reduce the size of state government, strengthen our communities, expand job opportunities, and put the state on better financial footing. Among our many accomplishments this session, we were able to pass two budgets, one dealing with our current fiscal year that ends June 30, and the other budget passed is for fiscal years 17-18/18-19. The upcoming budget for the next two fiscal years will only increase spending by .6 percent for a total of $8.9 billion. The budget ultimately presented the most significant challenge this session, requiring collaboration between the Governor’s Office and senators. Unfortunately, we were unable to pass any legislation that would reduce income or property taxes. LB 461 offered some ideas on how to on to reduce taxes but as it was originally written I could not support it but with amendments that I helped draft it had the potential to become significant tax legislation providing relief for all Nebraskans. With the budget crisis it was extremely difficult to pass any meaningful legislation. I am hopeful we will be able to address similar legislation again next session.

The Legislature also established a special committee that will oversee the state Department of Correctional Services. LR 127, which creates this committee, will continue to study the issues addressed by the previous investigative committees and review the role of state agencies and their involvement in the justice system. The Executive Board appointed the following seven members to the committee, Senator Kate Bolz, Senator Tom Brewer, Senator Suzanne Giest, Senator Mike Hilgers, Senator Justin Wayne, and myself. This committee will meet several times over the summer visiting all the correctional facilities in the state and will be listening to officials, staff, and inmates on how the legislature can assist in making our Corrections Department better. The special committee will then brief the Judiciary and Appropriations committees in December 2017 and 2018 and issue a final report of recommendations to the Legislature before disbanding Jan. 19, 2019.

LB 46 which created “Choose Life” license plates was the first pro-life bill passed in the last five years. Nebraska joined 29 other states that currently offer the option of “Choose Life” license plates. 75 percent of the plate fees will be directed to the state’s Department of Health and Human Services’ Temporary Assistance for Needy Families program.

All bills that were introduced this year but were not passed or killed are still eligible for debate in January when the legislature resumes. The second session of the 105th Legislature is scheduled to convene Jan. 3, 2018.

By the time you are reading this the One Hundred Fifth Legislative Session will have concluded sini die. We completed our work early this year and adjourned on the eighty sixth day. Most of the last few days of the session were spent trying to finish up a few pieces of legislation that had taken a little more time to complete. Several of our final hours were spent on the budget and the efforts to sustain or override the Governors line item vetoes of the budget. I did not vote to override any of the Governors vetoes. I am very aware of everyone who is having to take less tax dollars than they thought they were going to have or are having to live with the same amount of tax dollars as last year. We have been inundated from any corner of the state about the possibility of fewer tax dollars available to spend on state services. But the fact of the matter is that we are facing a one billion dollar deficit and we are just going to have to get along with less. I am still not comfortable with our budget because I am very fearful that our projected revenues will not be met going through the rest of 2017. It is better to make some smaller cuts in spending now rather than having to make much larger cuts in the future. Of course the alternative for several of my colleagues is to raise taxes.

The line-item veto of funding the Medicaid budget does not mean that providers will receive across-the-board rate reductions. The Medicaid aid budget is a block appropriation based forecasted need and Medicaid has the responsibility to manage the program within its appropriation and minimize adverse access-to-service issues for Medicaid eligible individuals and family. An example given by the Department of Health and Human Services is “Medicaid has identified that Nebraska is an outlier in reimbursing certain hospital and professional services for Medicaid/Medicare dual eligible member services up to the Medicare rate. Capping payments at the Medicaid rate, as 44 states do, would achieve the general savings necessary to meet the requirements of the Governor’s veto.” The Department of Health and Human Services also stressed that this does not impact services not covered by Medicare like long-term care, nursing home care, and assisted-living care services. The Medicaid program will work with stakeholders to devise an appropriations reduction strategy that protects critical services like long-term care.

Last week the legislature debated the 2017-2019 state budget bills and gave the final approval on May 9. LB 331 was one of the last three components of the state’s two-year budget, which would create/make funds transfer and lower the minimum cash reserve requirements from 3 to 2.5 percent for the current biennium. This bill initially failed to meet the thirty-three votes needed to pass with the emergency clause meaning no funds could be transferred or created immediately. Some details regarding the 2017-2019 biennium budget are as follows: The Legislative Fiscal Office and the Department of Revenue certification of the February NEFAB forecast projects $533,348,408 net General Fund tax receipts for the month of April 2017. However, the actual net General Fund tax receipts were $477,844,852 which is a difference of $55,503,555. In Nebraska, unlike some other states, the Executive Branch and the Legislative Branch has always agreed to budget from the forecasting board projections. The forecasting board bases their projections off of information provided to them by both the Nebraska Department of Revenue and the Legislative Fiscal Office. In order to meet the fiscal year projection, we would need May and June receipts to increase by 5.35 percent each month, which is unlikely to happen.

This past Tuesday, May 9, I attended and spoke at a press conference, with twelve other senators, about our concerns with the budget bills. I did not like the budgeting bills because I believed that the forecasting numbers were not accurate. The numbers will eventually be lower moving forward because the Ag economy is down as of now. The urban economies have yet to be impacted by the ripple effect however, it is still coming. We have also been under forecast on receipts for fourteen out of the last twenty-two months. Ultimately, the legislature needs to cut more spending.

These bills went to Governor Ricketts’ desk for him to decide whether to sign them or to make line-item vetoes. The governor has stressed his opinion about wanting more cuts, as well as, not lowering the minimum reserve. By the time you read this article we will know what line items he has vetoed and which lines the legislature sustained or over road.

Congratulations to all the recent high school and college graduates from the district! I would also like to congratulate all of the athlete’s from the 44th Legislative District who qualified for the state track meet. Congratulation’s and Good Luck!

On May 2, we debated LB 461 which was the Governor’s and Revenue Committee’s comprehensive tax plan. After six hours of debate it fell short of the needed votes to pass. In its original form I did not support LB 461 but after several hours of negotiating with multiple senators we came up with an amendment that would have provided significant property tax relief, as well as, income tax relief that would have been triggered based on revenue growth of the State of Nebraska in future years. This would have been a good bill but in the end not enough senators were comfortable with the concept of triggers based off the forecasting boards’ projection for revenue growth for the state of Nebraska.

LB 98 was debated on general file for close to six hours and unfortunately ended up two votes short of breaking the filibuster. LB 98 would provide over and fully appropriated Natural Resource Districts with an additional 10-year extension, of an existing sunset date, on a 3-cent levy to attempt to reduce water consumption within their NRD boundaries. Although, we were unable to break the filibuster this year, LB 98 is an important issue that I believe we will need to revisit next year.

This week we are dealing with the final passage of our biennium budget. Although, this budget contains more spending than I am comfortable with, ultimately, the State of Nebraska needs to have a budget in place to begin our fiscal year, July 1.

Each Legislative session senators have an opportunity to extend an invitation to the ministers, in our respective districts, to offer the morning prayer. The Chaplain of the Day gives the invocation in the morning before the start of the legislative work day. There is an effort every year to have a faith leader from each district in Nebraska on at least one day. This past week wrapped up with final Chaplain of the Day Pastor Jack Whitcomb from First Congregational United Church of Christ in Stockville, NE. Other chaplains from Legislative District 44 that volunteered to give the morning prayer are: Pastor Rob Clay from Imperial Bible Church in Imperial, Preacher Wayne Vogel from McCook Church of Christ in McCook, Pastor Johnny Walker from West First Chapel in McCook, Pastor Phyllis Dunlop from First Christian Church in Elwood, and Pastor Jason Dowell from Freedom Baptist Church in Stamford. Again, I would like to thank each Pastor for taking the time to travel to Lincoln and offer the morning prayer to the legislature. If you think your pastor might be interested in volunteering for next year feel free to contact my office for more information.

April 25 the Legislature kicked off debate on the state’s $8.9 billion budget package. The state’s budget is structured on a two-year basis, with the budget passed during legislative sessions held in odd-numbered years. The committee’s budget package contains seven bills, four of those had already been advanced to select file as of last week. LB 328 that would provide for the $12,000 annual salaries of Nebraska’s state senators, advanced 35-0. LB 329 was advanced 40-0 and would fund salaries and benefits for judges and constitutional officers. Also, LB 330 which would appropriate funds for reaffirmed and new capital construction projects was advanced on a 40-0 vote.

LB 332 which was introduced by the Speaker at the request of the Governor and was introduced with the purpose to provide for transfers to/from cash funds and is ultimately sweeping money out of several cash funds. The Appropriations Committee’s budget recommended a series of transfers totaling $170 million from cash funds to the General Fund during the fiscal year 2018-19. During debate last week there were proposed amendments to take less money from a Department of Roads cash fund and ultimately decision to take $15 million each year from the Highway Cash Fund was left in place. There was a proposal to make up the $15 million taken from the Highway Cash Fund by taking the same amount from the Cash Reserve however, it failed. An amendment offered on LB 233 intends to save the state around $35 million by suspending the personal property tax exemption and the Angel Investment Tax Credit. This amendment would assure that LB 233 would take less money from the Cash Reserve Fund.

A few highlights from the 2017-19 budget are: $62 million general fund increase in state aid to schools, $15.4 million increase for Corrections staffing, programs and equipment, $14 million increase in the Nebraska Homestead exemption, $24.7 million in base reductions to state agencies, $13 million reductions to the University of Nebraska, to maintain a roughly 1 percent average budget growth. In order to reach an agreement there will be sacrifices that everyone will have to make in order to maintain the balance of cutting and spending in the package. The remainder of the budget bills are being dealt with this week. We have an additional $55 million short fall as the forecasting board indicated this past month due to a continued slowing of the state’s economy.

We are two-thirds of the way through the legislative session and Senator Chambers has officially been seated as the senator from District 11. Last Thursday, the Legislature accepted the recommendation provided by the special committee appointed to review the residency challenge. In the 2016 legislative race Senator Chamber’s opponent, John Sciara claimed that Chambers did not live in his north Omaha home. Sciara then filed a qualifications challenge against Senator Chambers. The challenger established nothing more than the incumbent has not always been physically present at his home on Binney Street. After hearing testimony and gathering exhibits, the special committee decided that Sciara was unable to prove that Chambers did not reside in his district the year prior to the election. The seven member committee recommended that the Legislature deny the challenge and dismiss Sciara’s petition. The legislature will be reviewing policies and procedures in case a challenge like this happens again.

The past week we also heard LB 640, introduced by Senator Groene. LB 640 would decrease the maximum levy for school districts and direct money in a property tax credit fund to increase state aid to districts that lose money as a result. This fund is supported by state income and sales taxes. The intent of LB 640 is to ensure that funding is distributed more fairly under the state’s school aid formula. Over the last decade we have seen the value on agricultural land increase and rural schools have seen less and less state aid because they are able to rely on property taxes to meet their needs. As a result we have seen a burden put on rural property taxpayers. I did support this bill but do acknowledge that property taxes in some urban districts could increase if LB 640 would be implemented. However, in many cases the property taxes on agricultural land has doubled in the last five years. All in all, this bill did not go anywhere and I ultimately do not see it going anywhere this year.

The legislature wrapped up this past week with debate on LB 461. LB 461 was introduced by Senator Smith and would lower Nebraska’s top corporate and personal income tax brackets, expand the earned income tax credit for low-income residents, cap statewide property tax growth and adjust the way agricultural land is valued for tax purposes. During debate last Friday, senators filed a number of motions to amend LB 461 which will guarantee a lengthy debate. When the Legislature adjourned Friday afternoon we had only made it through the first amendment filed.

LB 72 is designed to enhance access to capital markets for governmental entities by providing that general obligation bonds, notes, and other financing obligations of governmental entities have a statutory lien on bond pledged revenue sources. More simply put this would create a statutory lien on government issued bonds to ensure that bondholders are paid first if the issuing government entity goes bankrupt. LB 72 was introduced because current state law is ambiguous because it was unclear which of a city’s creditors would receive payment first in the event of a bankruptcy, a problem illustrated in 2013 by the bankruptcy of Detroit. Following a bankruptcy, the federal courts will often look toward state law to determine which of a city’s debtors are paid first. With LB 72 it would ensure that the bondholders have priority.

During floor debate it was explained that bondholders are providing a service to cities and other political subdivisions by loaning them money, in exchange for interest in order to build infrastructure projects. LB 72 would guarantee that government-issued bonds are backed by the full faith and credit of the issuing entity. This bill was filibustered during first round debate and thus required 33 votes to end debate and ultimately passed on a 29-14 vote to advance from General File to Select File.

Another controversial bill we heard this past week was LB 68 which would erase the authority of Lincoln and other Nebraska communities to enact gun regulation laws, with a few exceptions for Omaha. During debate it was stressed that this bill protects “the fundamental right to keep and bear arms” by centering authority for gun regulation in the Legislature. This would end the patchwork of local laws that have been putting law-abiding gun owners in jeopardy of violating local regulations as they travel in the state. This bill was also filibustered during the first round of debate and did achieve the 33 vote’s necessary to invoke cloture and ultimately advanced to Select File on a 32-12 vote. On both of these bills, I did support the cloture vote and ultimately voted to advance both bills to the next round of debate.

This week you will probably have heard our discussions are about property taxes, income taxes and the way we fund schools in the State of Nebraska meaning the TEEOSA formula. As of the writing of this article, I am seeing no consensus by the Legislature on any of these issues. I am hopeful during debate on these topics we can come to an agreement that will eventually bring relief to all tax payers in the State of Nebraska.

Sen. Dan Hughes

District 44
Room #1210
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2805
Email: dhughes@leg.ne.gov
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